Wednesday's Market 11/13/2013

I was a bit premature in calling yesterday afternoon’s low of 1762.29 the completion of a 5 wave sequence from the 1773.44 high. Instead of the SPX moving higher at the open, as I expected, it moved lower.  After gapping lower, the index reached a low of 1760.44 before heading higher. It did not take long for the SPX to close that opening gap, and after a brief pullback it continued higher until reaching 1776.33. As I have been pointing out, this was a critical level as it marks the minimum point at which the sequence from 1074.77 could complete.  From there the index underwent another very minor pullback before heading higher into the close. It closed on the high of the day at 1781.87.

Following the opening dip, the SPX completed a sequence at the 1781.87 high. Wave 1 finished at 1765.80, wave 2 at 1762.66, and wave 3 at 1767.73. Wave 4 was an inverted corrective wave which ended at 1773.49, with 1781.87 then completing wave 5. I had been looking for a move to 1782 to complete a sequence from 1746.20, and possibly 1646.47, which would in turn complete a sequence from 1560.33, and 1074.77. I had expected been expecting to see 5 waves from 1746.20, but at the moment I see only three waves at 1773.44-1760.44-1781.87.

If my current count is correct, that would mean the SPX should have at least one more move to the upside. This wave would have to complete below 1787 in order to complete a sequence from 1646.47. A move down to 1767-1773, followed by a move higher would target a level below 1787. A move above 1787 would likely mean a further continuation of this move, as hard as it is to believe. At the moment it looks like 1829 would be a minimum target.

There is an alternate count from 1646.47 that would not require another wave, and has an upside limit of 1791. This count has the inverted corrective wave 2 completing at 1746.20, wave 3 at 1773.44, and wave 4 at 1760.64. That makes the current wave the fifth and final wave.  This would complete the entire sequence from 1074.77.

A lot of variables I know, but the market is at one of those points. The current wave could complete between today’s high and 1791. A move below 1760.64 would likely mean the sequence from 1074.77 has completed. If the SPX moves above 1791, 1829 would be my next upside target.